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$700 billion question: Why rush?

“Secretary Paulson’s proposal for a $700 billion grant of power with no legislative oversight and no judicial review…is an invitation to corruption and tyranny.”

Who wrote that? Some left-wing nut job out to smear the administration? No. That’s Newt Gingrich, the scheduled speaker at the ProDealer Industry Summit, scheduled to take place Oct 2.

“We could very well spend $700 billion, and not resolve the crisis.” Who said that? Some ranting blogger trying to score cheap political points? No. That’s Sen. Richard Shelby, the ranking Republican Senate Banking committee member.

Ladies and gentlemen, for years this industry has objected to reckless and poorly reasoned government intervention in the affairs of business. And now comes this $700 billion cash for trash proposal to prop up Wall Street?

Many see wisdom in the plan. The situation is dire, The economy requires major surgery to fend off disaster. We can pay now, or pay much more later. This is the position that’s eloquently defended by the National Association of Home Builders (NAHB). In its most recent statement, the association of the nation’s builders said “there’s no time to waste” and urged legislation that would rescue the U.S. economy “before conditions deteriorate to a point that could trigger a global financial meltdown.”

By coincidence, NAHB president Jerry Howard is also scheduled to speak at the ProDealer Industry Summit. (Note to summit staff: good job getting topical speakers!)

News flash: This editorial writer doesn’t have the solution to America’s financial problem. But I do have healthy skepticism for any hurry-up-and-approve plan to spend $700 billion of taxpayer’s money.

The Treasury Secretary who is calling for the bailout hasn’t shown what I consider to be an admirable record in anticipating the effects of government bailouts and intervention. On Sept. 15, for instance, he championed “the soundness and resilience” of our financial system. At press time, he’s saying something very different. Who knows what he’ll say later?

This legislation has to be crafted in a way to avoid the recklessness that got the economy into this mess. Taxpayers should get something to show for their money in the form of equity. Executives on the receiving end of subsidies have to feel some pain—it’s only fair.

“I believe companies that make bad decisions should be allowed to go out of business.”

Who said that? Somebody out to discredit the president? Actually, that was the president himself, speaking directly to the people late last month. Of course, he went on to explain why he intended to act contrary to that belief.

Why not just let them die and be done with it? That may be as reckless as investing in subprime mortgage-backed securities. My personal feeling: do something, but don’t do anything so fast.

There’s a chance this editorial came too late: a law may have already been enacted by the time you read this. If that’s the case, just apply the above to the next bailout.

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